Finance

Best mutual fund for long term

Best mutual fund for long term

Mutual Funds in InBest mutual funddia and their growing popularity

Mutual funds have been around for over a century and have become increasingly popular in the past decade. In India, mutual funds are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI Act, 1992. Mutual funds offer investors benefits such as diversification, professional management, low cost, and liquidity.

A large part of this growth is due to increased awareness among investors about the benefits of investing in these schemes. Mutual funds allow people with limited investment knowledge to invest in stocks without worrying about what stocks they should buy or which broker they should invest with.

How to choose the best long-term mutual fund

This article intends to help you make the right choices when investing in long-term mutual funds. We are going to discuss the 2 best long-term funds- SBI Long-Term Bluechip Fund and Axis Long-Term Equity Funds.

Mutual funds are a great way of diversifying your investments and reducing risk. However, you should know that not all mutual funds are created equal.

The first step is to identify what your goals are and how much risk you can afford to take on. Once this is done, finding the best long-term mutual fund for your needs becomes easier.

There are many different types of funds available in Indian markets today, so there’s no shortage of options available for investors who want to find the best long-term mutual fund for their needs.

If you want to invest for longer, equity funds are one of the best investment options. It would help if you opted for growth mutual funds, as the returns are continuously compounded periodically. The two mutual funds worth investing in this category are:

SBI long-term Bluechip fund

If you are looking for an investment for at least three to four years and expecting high returns, then SBI Long-Term Bluechip funds are the best option. The scheme was launched in 2013 and had been providing a 14.58% annualized return since its launch. SBI Long-Term Bluechip fund are the growth funds that diversified investment options in equities with 94.7% in domestic equities with around 67.92% in large cap, 9% in mid-cap, and 1.08% in small-cap stocks, and 5.35 in others. Most of the stocks listed in these funds are financial, technology, healthcare, energy, and automobile.

Many investors try to avoid a portfolio with higher risk, but this portfolio also allows you to moderate your losses. 

The current NAV of the fund as on 14th July 2022 was INR 56.8234. the fund has an expense ratio of 0.96%, and the exit load is 1.0%.

You can invest in an SBI Long-Term Bluechip fund with a minimum investment of INR 5000 and then opt for a minimum SIP of the same amount. Every three years, the investment has doubled.

The best part about SBI Long-Term Bluechip funds is that it has provided consistent returns by controlling the losses in the bearish market.

Axis long-term equity funds

Another option for investing in long-term equity is Axis Long Term equity funds. It is a growth fund with an ELSS scheme. The fund was launched in 2013 and has delivered returns of 16.98% since its launch. The portfolio allocation of Axis Long Term Equity Funds consists of 97.97% in equity and 2.08% in debts. It is claimed that the fund has doubled money after every 6 years. Major sectors in this portfolio include technology, healthcare, financial, healthcare and services.

Unlike SBI blue chip fund, this scheme also helps to moderate your losses.

As on 14th July 2022, the NAV of the Axis Long Term Equity Fund was INR 67. The fund has an expense ratio of 0.77% with a 0% exit load. The lock-in period to invest in this fund is three years.

You can invest in Axis Long Term Equity Fund with a minimum amount of INR 500 followed by a minimum SIP of INR 500.

What is the fundamental difference between long and short-term mutual funds?

Investing for the long term would entail investing for more significant financial goals such as retirement, child education, buying a house, etc., and that can be fulfilled only by investing prudently for the longer duration. Thus, equity mutual funds are typically considered to be long-term mutual funds as the investment horizon needs to be extended. However, short-term investments are typically for short or mid-term financial goals such as buying a car, holidays, etc. So, if you have a minimum of 3-5 years tenure, you can opt for equity mutual funds to fulfil your mid and short-term investment goals. But for shorter tenure, you should ideally opt for debt mutual funds. Debt mutual funds provide a better post-tax return than traditional banking products such as fixed deposits.

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